| NEW YORK
NEW YORK Discover Financial Services Inc
(DFS.N) and card networks Visa Inc (V.N) and MasterCard Inc
(MA.N) have settled an antitrust lawsuit, sending shares of the
fourth-biggest U.S. credit card company up over 14 percent.
In 2004, Discover had filed a lawsuit against MasterCard
and Visa seeking roughly $6 billion in damages, as it contended
the card networks had harmed its business by preventing their
member banks from issuing credit cards for Discover's network.
Visa and MasterCard had already agreed to settle a similar
lawsuit with American Express Co (AXP.N) for about $3.9
Visa, MasterCard and Discover confirmed in separate
statements the deal and said they were working on the specific
terms of the settlement.
"Terms of the settlement will be available following
completion of the deal," Discover said in a statement.
The agreement had been previously disclosed to Reuters by a
clerk for Judge Barbara Jones in U.S. District Court. Jury
selection starting on Tuesday for a trial before Jones had been
U.S. courts have ruled that efforts by Visa and MasterCard,
the world's two biggest credit card companies, to restrict
banks from working with rivals was anti-competitive and broke
Visa had placed $3 billion into a U.S. litigation escrow
account with net proceeds from its March initial public
offering -- funds that were withheld from its U.S. member
banks' distribution in the IPO.
The world's largest card network has said the account was
used to pay $2.1 billions to American Express and would be used
to pay for any future settlement in other related litigation.
"This settlement is covered by the company's retrospective
responsibility plan, a mechanism for addressing potential
liability in certain Visa litigation," Visa said.
Shares of Discover were up 14.3 percent to $12.12, while
MasterCard was up 3 percent to $178.76. Visa stock was down 0.6
percent to $58.54 in afternoon trading on the New York Stock
(Additional reporting by Martha Graybow; editing by Gerald
E. McCormick and Tim Dobbyn)